US President Donald Trump’s ratcheting up of pressure on Federal Reserve chair Jerome Powell sucked the wind out of investors as stocks on Wall Street tumbled and the greenback sank.
Trump was back on the Truth Social platform to complain about Powell’s setting of interest rates, warning the economy could slow “unless Mr Too Late” cuts rates immediately, having said before the Easter weekend that the Fed chair’s exit can’t come fast enough.
The kiwi dollar climbed as high as 60.19 US cents – its highest level since Nov 7 – before settling back to 60.04 cents at 7am in Auckland, up from 59.64 cents on Friday.
“The US dollar remains significantly over-valued against long-term valuation metrics and if we’re early in a crisis of confidence, with Trump continuing to chip away at the bedrock of US institutions, then there is plenty more downside potential,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “Our long-standing 2026 year-end target of 66 US cents also looks under threat of being achieved in the not-too-distant future.”
Trump is due to meet executives at big box retailers including Lowe’s, Home Depot, Target and Walmart as businesses try to work out the impact of his tariff regime.
Investors on edge
Wall Street had a nervous return from the Easter weekend with the S&P 500 sinking 3.2% as investors fret about the future independence of the Federal Reserve.
The Nasdaq Composite dropped 3.5% with the Magnificent 7 stocks among the hardest hit, as Nvidia sank 5.4% and Tesla – which reports its earnings on Tuesday in the US – slid 6.3%.
The bond market was also sold off, with the yield on US 10-year Treasuries climbing 9 basis points to 4.42%.
Google-parent Alphabet slid 2.9% as the US Justice Department launched its bid to force a break-up of the search engine giant in the latest phase of an antitrust hearing that last year found Google operated an illegal monopoly.
Meanwhile, Netflix advanced 2% after reporting better-than-expected earnings on Thursday after the closing bell.
Local data today include Statistics New Zealand’s merchandise trade figures for March, while retirement village operator Summerset Group Holdings has its annual meeting in Auckland.
Reporting by Paul McBeth. Image from Ferdinand Stöhr on Unsplash.